Trying to analyze and assess vacation home

[Marvin S.]

Good morning

This is my very first post and I'm really excited about this forum. A friend recommended it to me and I've just been reading ever since.

My wife and I recently found a lake house that has a great view of the lake, bones, and location. However, the home has been absolutely destroyed. My wife didn't even want to go in, carpets were stained with what looks like urine all throughout the house. It wreaked and has been sitting empty since Feb 2014.

Here are my main questions? (please forgive me if they've already been answered here)

How do I properly value this home to present a reasonable offer?

It will need:

- New floors throughout the house

- New roof

- New deck

- Paint, possibly even replacing dry wall (there are stained yellow patches throughout the home)

- The basement to be finished

- Brand New Kitchen

- Brand new bathrooms

I do not know the first thing about carpentry so I would have to find a reliable contractor but how do I find out the general cost for projects like those listed above in my area?

I remember reading about the 70% rule in the Ultimate Beginners Guide. Which says to figure out how much the home would be worth after repairs, then factor in repair costs, and offer 70% of that number.

Any advice, website articles would be very much appreciated. I really look forward to being a part of this community. Happy Friday!

[Collin Goodwin]

Welcome, Marvin! 70% is a good rule of thumb, but is not set on stone. With a complete renovation as you are referencing, you will really help yourself by getting a professional bid to complete the work. In order to do this though, you are correct, you will need a starting figure to get it under contract. Take a look at comparable properties with a Realtor, check out what vacation homes are renting for, and try to determine a solid ARV of the home... based not only on resale value, but also consider rental income since it sounds like you might be holding on to this property. Make sure you put an Inspection contingency into the contract as you will be able to evaluate the property with a professional while it is in escrow, and potentially re-negotiate if the figures do not work out as you had planned.